Incorporation of law firms to become Limited Companies

Armstrong Watson has helped countless law firms incorporate their practices. We will help you decide if incorporating is the right decision for you, and if you decide to proceed, we'll manage the process from end-to-end, ensuring a smooth and seamless transition.

We will agree fixed fees for each stage of the process in advance and our costs are a fraction of the large tax savings made through incorporation as outlined in the process below.

Initial face to face assessment meeting to consider the implications and benefits of incorporation. Assistance with decision to convert.
Attendance at planning meeting to provide our 12 page incorporation checklist that details every task that needs to be undertaken; to allocate those tasks to specific people at the law firm or at Armstrong Watson; and to set deadlines for those tasks to be completed.
Provision of a soft copy of the checklist, updated by Armstrong Watson on a monthly basis with accompanying notes of tasks that are required to be completed in the following month.
The following are usually carried out, but are subject to the allocation of tasks in the planning meeting.
Provision of the SRA application forms for the company to become a recognised body, with suggestions on how to complete the forms.
Creation of the company.
Review of the SRA forms prior to submission to the SRA.
Preparation, or review, of integrated financial forecasts and business plan prior to submission to the SRA.
Preparation of a detailed bespoke goodwill valuation report and agreement of the goodwill valuation with HMRC via form GC34. Generally, the higher the value, the greater the tax benefits. The detailed valuation report supports that.
Meeting to assist with terms to be included within the shareholders' agreement. Suggestion of, and subsequent working alongside, corporate lawyers to prepare the shareholders' agreement, business transfer agreement and articles. Key items to consider will be whether there is a full market valuation for every change in share ownership, or whether a valuation mechanism linked to classes of shares can prevent that. Key also will be who will acquire the shares of retiring owners - usually the company or other shareholders; and how shares will be allocated to new owners and at what cost.

Contact our Legal Sector Partner, Andy Poole, on 07828 857830 or andy.poole@armstrongwatson.co.uk to discuss how we can help you.

What is it?

A managed service to convert law firms to Limited Companies.

Who is it for?

Sole practitioners, partnerships or LLPs of all sizes in all locations.

What are the benefits for your firm?

You will reduce your exposure to risk
You will be tax efficient
You will future proof your business and ease succession
You will be compliant

What do I have to do?

Attend two hour assessment meeting, two hour planning meeting, one hour shareholders' agreement meeting. Provide regular updates to Partners. Action points from the planning meeting.

What are the deliverables?

Incorporation of your law firm (see the detailed process above).

What is the cost?

£1,250 plus VAT and disbursements for the initial assessment meeting. £1,595 plus VAT and disbursements for the planning meeting and provision of the incorporation checklist. The above are the fixed fee payable in advance cost options. Additional fees to be agreed in advance following the planning meeting. All services will be provided remotely via video conferencing, however, options are available for face to face if required.

How long will it take?

Six months

Our experience

Armstrong Watson has helped, or is helping, nine law firms to incorporate their practices within a twelve month period.

CASE STUDY

The goodwill in one of those was valued at £300,000 for a two partner practice, initially saving £45,000 in tax between the two partners. Ongoing annual tax savings are expected to amount to £15,000 per partner.

What our clients say

In 2016 we engaged the services of Armstrong Watson’s specialist Legal Sector as we sought to change our business structure to reflect our modern approach to Law at our dynamic and growing law firm. Andy Poole and the team were able to guide us through the various structure options to find the structure which met our business needs. The checklist approach used allowed us to delegate tasks to the appropriate people and track what needed to be done and when. As part of this process we were introduced to one of Armstrong Watson’s Financial Planning team who advised us on ensuring the business and its key stakeholders are adequately protected in the event of death or critical illness and continues to guide us through our pension planning including the use of commercial property. I actually enjoy talking with him and the rest of the Armstrong team! We were delighted by the forward thinking joined up approach and look forward to our working relationship with the Armstrong Watson team continuing to develop.

Ben Pepperell, Chief Executive Officer, Pepperells Solicitors